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Accountability Office Urges Air Force to Re-Bid Tanker Contract

WASHINGTON, June 18, 2008  The Government Accountability Office has recommended the Air Force reopen the bidding process for the service’s aerial refueling aircraft contract.

The GAO – the investigative arm of Congress -- made the recommendation following a review of the contract process that selected the Northrop-Grumman/EADS/Airbus consortium as the winner of the $35 billion contract in February. Boeing Company protested the decision.

The initial contract for the KC-45A tanker was for 64 aircraft at $10.6 billion.

“Our review of the record led us to conclude that the Air Force had made a number of significant errors that could have affected the outcome of what was a close competition between Boeing and Northrop Grumman. We therefore sustained Boeing’s protest,” said Michael R. Golden, the GAO’s managing associate general counsel for procurement law, in a news release.

The GAO made its determination based solely on irregularities in the contract procedures. The office did not make any judgment on the merits of the rival aircraft.

Air Force officials release a statement that says the service is reviewing the GAO’s decision that sustained portions of Boeing’s protest, and that once the review is complete, the Air Force will be in a position to determine the best course of action.

“The Air Force will do everything we can to rapidly move forward so America receives this urgently needed capability,” Sue C. Payton, assistant secretary of the Air Force for acquisition, said in the statement. “The Air Force will select the best value tanker for our nation’s defense, while being good stewards of the taxpayer dollar.

“As soon as possible, we will provide the Air Force’s way ahead,” she continued. “We appreciate the GAO’s professionalism and thoroughness in its assessment of the protest of the KC-45A source selection.”

During a media availability last week, Defense Secretary Robert M. Gates said it is important to start getting these new aircraft on flightlines as soon as possible. He said the tankers flying today are the same ones he flew in as an Air Force second lieutenant in 1967.

Pentagon Press Secretary Geoff Morrell said during a news conference yesterday that Pentagon officials still fully support the Air Force choice, and that the process must move forward. “This is the No. 1 acquisition priority of the Air Force,” Morrell said. “It has to be. It is 10 years overdue.”

The average age of the KC-135 tanker fleet is 47 years old. “Any further delay would be a real problem,” Morrell said.

The Air Force does not have to accept the GAO finding. By law, the service has 60 days to respond to the agency.